Welcome

Congratulations on taking an important step towards learning the multiple benefits available for the few traders and investors who learn how to navigate this unique market.

In The Basics of Options Trading you will learn:

  • The two types of options contracts and how they work
  • What it means to Buy an option contract
  • What is means to Sell (or Write) an option contract
  • The key elements of a standardized option contract
  • How options are quoted
  • How and when options are exercised and settled
  • Navigating the options market
    • Vertical and horizontal navigation
    • Time and price
  • Factors that affect the price of an option
  • How to measure changes in options prices
    • Greek symbols for estimating option pricing
    • Examples of estimated price change vs. actual price change of options
  • Basic option spreads and combinations
    • How to combine options into spreads
      • Verticals
      • Time (Horizontal)
      • Calendar and Diagonal
    • How to define risk using spreads
    • How to hedge and maximize income using spread combinations
      • Condors
      • Butterflies
      • Double Time Spreads
  • Probabilities and market math
    • Standard deviation: The basis of identifying what is “normal” volatility
    • Historic (statistical) volatility
    • Implied (theoretical) volatility
    • What causes differences between historical and implied volatility
    • The common reasons for changes in volatility
      • Scheduled events
      • Unknown events
      • Post-event

By the end of this course, you will understand how, and why, options contracts change in value over time and changing market conditions. This course will give you a foundational knowledge that prepares you to capitalize on expected and unexpected changes in the value of options.

Even if you have prior experience and education about options contracts, the concepts presented in this course may provide a better understanding of the unique opportunities available in the options market and prepare you to become a profitable options trader.